The federal government has come up with stringent conditions for holders of national prize bonds worth Rs. 40,000. The owners can no longer sell their bonds from now on nor can they encash or redeem these after March 2020.
These measures were taken by the government to promote the registration of prize bonds of Rs. 40,000 which are misused extensively as an alternate currency or as undeclared or black money for the purpose of money transactions and avoiding taxes.
Hence, the government made its registration necessary for its owners and announced to discontinue its draw for an indefinite period, according to instructions issued by the State Bank of Pakistan (SBP). Exploitation of high denomination prize bonds was repeatedly identified by the central bank in its various reports.
It is estimated that the worth of all prize bonds stands at over Rs. 940 billion in which the share of prize bond of Rs. 40,000 is nearly Rs. 600 billion.
Prize Bonds of Rs. 40,000 Can Be Converted Into Saving Products
The bondholders shall have the following options to replace these bonds:
1. Conversion to Premium Prize Bonds (Registered).
2. Replacement with Special Saving Certificate (SSC)/ Defence Savings Certificate.
The bonds can be converted to Premium Prize Bonds through the 16 field office of six commercial banks including National Bank of Pakistan, Habib Bank Limited, United Bank Limited, Allied Bank Limited MCB Bank and Bank Alfalah Limited. Also, bonds could be replaced through branches of National Saving Certificates.
The method to convert prize bonds includes the submission of a written application by its holders for Premium Prize Bonds. The application forms are available here.
Dollarization will boost. Gold will be in high demand
People will stop keeping wealth even in Pak Rs (as what if 5000 notes are cancelled ?)
Hats off to economic wizards
Tabdeeli govt pagal hogae ha
This action would result into “gold rush” and increase in foreign currency prices in the country. This is especially true as the dollar rate is still not stable and analysts believe it may touch Rs170 to a dollar.
In my opinion the government should have included 40k bonds in the amnesty scheme in the following manner.
A. Presently circulating 40k bonds be discontinued with immediate effect.
B. The owners of bonds be given two choices.
1.they may encash or replace with the premium 40k bond.
2. Persons holding these bonds should go tax free up to the amount of 500000.
Any amount over and above 500000 could have been taxed at the rate of 1% if already declared in income tax returns and 3% for the undeclared wealth.